ShadowRAM: October 14, 2002

So, Walter Hewlett ran around for the better part of a year decrying Hewlett-Packard's then-proposed acquisition of Compaq Computer, saying it was a bad investment.

What Hewlett didn't say was that the private foundation he oversees had actually bought and sold Compaq stock,at a profit,barely a year before HP said it wanted to buy the Big Q.

According to tax records filed by the William and Flora Hewlett Foundation, which Walter Hewlett oversees, the organization sold more than 20,000 of its shares of Compaq in 2000 and made a profit of $37,000.

While that might seem like a paltry sum for a billion-dollar foundation, its investment in Compaq,then a rival of HP,did better than some of its investments in other HP rivals. For example, the foundation lost money on some of its investments in Lexmark International and Xerox, while Hewlett was on the HP board, tax records showed.

The foundation also lost $317,000 in one investment in HP rival Sun Microsystems, also while Hewlett was on the HP board, according to the records.

Speaking of Sun, is CEO Scott McNealy feeling the heat from the board in the wake of a stock price in the $3 range and the unceremonious departures of a number of top managers?

That was the implication at the Gartner Symposium/ITxpo 2002 last week when McNealy took a question from a Gartner analyst on whether he will still be at Sun one year from now. "I sure hope so. I'm fairly healthy," McNealy said. The analyst replied: "I hear Ed Zander is looking for a job, and the board is talking to him."

"Good," McNealy said, adding, "If anybody wants this job, have at it. It ain't so easy right now. CEOs are real bums."

McNealy didn't take as many potshots at Microsoft as he usually does. But he did pin this rather unique definition on the IBM Global Services approach: "They install all their folks. They outsource and lobotomize. And they invoice."

If the Gartner conference is any indicator, don't expect any significant upturn in IT budgets. The squeeze is on, big time, with no end in sight. One of the biggest sessions at the show was a business-value session focused on standard methodologies for determining return on investment for IT solutions.

Microsoft CEO Steve Ballmer said the company is planning to bring the antispam capabilities in MSN 8.0 into the corporate market. That's a good idea, we think, considering that our MSN mailbox was filled with spam about 30 seconds after we activated a new account last year.

Ballmer said he's on speaking terms with everyone of his rivals except,you guessed it,Scott McNealy.

We hear Ballmer may be on more than speaking terms with Tom Siebel. The rumor,unconfirmed, but juicy nonetheless,is that Microsoft may be making an investment in Siebel Systems or perhaps even buying it outright. We wonder if a Republican administration would let that one sail through antitrust waters.

Last week, a longtime attendee of Microsoft's MEC event went fishing through an old backpack and found a multicolored pen from MEC 2000 in Dallas. The pen was proudly emblazoned: Microsoft Exchange and Collaboration Solutions Conference 2000. Oh, how Exchange has changed. All those collaboration goodies are now going into Windows.Net Server 2003, leaving Exchange, in the words of one pundit, one big mail switch.